Egypt’s pound officially stable, stronger in black market

CAIRO: The Egyptian pound stabilized at 7.53 per U.S. dollar Tuesday after a regular Monday Central Bank foreign exchange auction, while the local currency was stronger in the parallel market.

Over the past three weeks, the central bank of Egypt (CBE) allowed the pound to hold steady against the dollar after 10 consecutive depreciations in a fight against the black market since Jan. 18.

“The pound strengthened on the black market Monday and Tuesday as it was changing hands at 7.65 EGP per dollar, a very close level to the official market as banks now sell the hard currency at 7.63 EGP,” a dealer told The Cairo Post.

Meanwhile, another trader said black market traders refrained from selling the dollar amid a state of anticipation of tough procedures from the CBE.

“The bank offered $40 million and sold $38.4 million at a cutoff price of 7.53 EGP per dollar,” the CBE said on its website Monday. It remains the lowest level Egypt’s central bank had allowed the local currency to reach since auctions began in December 2012.

In light of its clampdown on the parallel market, the CBE, the auctions of which determine the rates banks sell the dollar to clients, widened the range in which banks can trade dollars last week to 10 piasters above or below the official rate, up from 3 piasters.

It also imposed a $10,000 daily ceiling for cash deposits in hard currency for both individuals and companies.

Some bankers expect the FX auctions and flexible exchange rates may help the central bank combat the active black market and narrow the gap between the official and unofficial prices ahead of the Economic Summit schedule in March.

Egypt hopes the long-awaited economic conference will lure fresh investments worth billions of dollars to boost its limping economy hit by political turmoil since the January 25 Revolution.